Commercial Credit debenture issue to close today

H.D.H Senewiratne

One of the leading insurance services companies in the country, Commercial Credit and Finance Plc's Rs 250 million debenture issue has already raised more than Rs 440 million until yesterday, which would be closing once it reaches the 500 rupee million target today.

"This is thirst first tradeable debenture issue under the government's new tax regime, which came into effect following last year's budget. "We will be oversubscribing once it reaches the total value of Rs 500 million today," its Chief Operating Officer Priyantha Perera told the Daily News Business.

He said that Rs 2.5 million five-year debentures of Rs. 100 each opened on January 23, 2013 with an option to issue a further 2.5 million debentures in the event of an over subscription, amounting to a total value of Rs 500 million. This debentures listed on the Second Board of the Colombo Stock Exchange with 20 percent interest payable on a quarterly basis, would yield an annual effective rate of 21.55 percent.

From 114 applications received by the end of February 01, trading day1,191,755 million had been issued raising Rs.119,175,500 million. "The company having the largest micro finance portfolio in the private sector entities which amounts to Rs 3.5 billion. The

debenture issue was in our corporate plan, which they intend expanding the branch locations up to 57, within the next two month from 42 location at present," Perera said. The issue would be closing today when the initial 2.5 million debentures or the entire 5 million are fully subscribed today. Under the new tax regime of the government, debenture holders are exempted from income tax and withholding tax, which would a big boost to the development of the corporate debt market in the country, he said. The company go into medium to small scale finance business entirely with deposits, leasing, higher purchase, gold loans, real estates and lands micro financé 'and many more. It also focuses on pawning sector in the country.